The Los Angeles County Board of Supervisors on Tuesday moved to slash millions allocated to homeless services, as officials seek to resolve a massive budget deficit.
The board unanimously approved an $843 million spending plan for fiscal 2026-2027 for the county’s new Department of Homeless Services and Housing, cutting spending on such initiatives by nearly $200 million.
The development comes as the HSH said last month it was facing a budget deficit of over $303 million. The shortfall has been partly attributed to lower-than-expected revenue from a renewed sales tax. Measure A was originally passed by voters as Measure H in 2017 and renewed in 2024 to allocate homeless funding to HSH and the Los Angeles County Affordable Housing Solutions Authority, which was the subject of intense scrutiny last year after an audit found it lost track of over $2 billion in homeless program spending.
However, Measure A has produced more revenue than feared, allowing the county this week to avoid the full $219 million in cuts initially expected.
Among the funding cuts was $27 million for outreach and navigation programs that help homeless people move into housing. Pathway Home, a program that provides temporary housing to homeless people, also saw a $92 million cut from its budget. The HSH will close 13 Pathway Home motel sites by the end of the next fiscal year.
“The reduction to Pathway Home is not a reduced commitment to encampment resolution,” LA County Department of Homeless Services and Housing director Sarah Mahin said Tuesday. “It’s a recognition that it was built on one-time funding and we need to expand strategies to include more cost-effective resolution solutions.”
California has allocated tens of billions to address the state’s homeless crisis in recent years.
In Los Angeles County, homelessness remains a major issue, with around 72,000 Angelenos currently on the streets, even as the city allocated nearly $1 billion to the crisis last year. A 2025 court-ordered audit found that LA did not properly track $2.3 billion in spending on homeless programs, leading to intense scrutiny of LAHSA. One of the people LAHSA contracted with to provide homeless services, Alexander Soofer, was arrested in late January on charges of using $23 million in homeless funding for personal use through the nonprofit organization Abundant Blessings.
“The audit’s findings confirm what I’ve repeatedly warned about — billions have been wasted on homelessness without oversight, accountability, or results,” Councilwoman Monica Rodriguez told KLTA in comments labeling the scandal as a “modern-day Titanic,” and lamenting the “pouring taxpayer dollars into a system and programs that continue to fail.”
A 2024 audit found that the state had lost track of roughly $24 billion spent on homelessness since 2018, raising concerns about the use of taxpayer funds.
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On Tuesday, the county’s acting chief executive officer complained that federal and state funding have pushed local budgets to the limit, putting homeless services on the line.
“The iceberg is in the distance, and we are trying to turn the wheel….the pressures on our county have only increased,” LA County CEO Joseph Nicchitta said. “We expect conditions to worsen next year as federal revenue reductions take hold.”